Vulcan Steel has reported preliminary FY25 earnings with stable EBITDA and reduced net debt, while highlighting cautious optimism for FY26 amid tough trading conditions.
- Preliminary FY25 EBITDA between NZ$106-109 million
- Net profit after tax expected NZ$14-16 million including NZ$3 million impairment
- Net debt reduced to NZ$232 million from NZ$276 million a year ago
- Banking covenant relief extended to June 2026
- Signs of sales stabilisation and cautious optimism for FY26 volumes
Preliminary Financial Performance
Vulcan Steel Limited, a key player in Australasian industrial product distribution and processing, has provided an early glimpse into its financial performance for the year ended June 2025. The company expects its earnings before interest, tax, depreciation, and amortisation (EBITDA) to land between NZ$106 million and NZ$109 million, with net profit after tax (NPAT) forecasted between NZ$14 million and NZ$16 million. These figures incorporate a NZ$3 million impairment related to the sale of assets from its Wintec operation in Australia, acquired through the Ullrich Aluminium deal in 2022.
Debt Reduction and Covenant Relief
Vulcan has made notable progress in reducing its net debt, which now stands at NZ$232 million, down from NZ$276 million at the end of FY24. This improvement reflects ongoing efforts to strengthen the balance sheet amid a challenging economic backdrop. The company’s banking syndicate has extended the relaxation of financial covenants to June 2026, providing Vulcan with additional flexibility to navigate uncertain market conditions. Importantly, Vulcan remains compliant with all covenants for FY25.
Market Challenges and Outlook
CEO Rhys Jones acknowledged the persistent economic headwinds in New Zealand and Australia that have shaped a tough trading environment. He highlighted aggressive pricing strategies by competitors and subdued consumer and business sentiment as key pressures during the year. Despite these challenges, Vulcan is seeing early signs that the downward sales trend is stabilising, with daily sales activity showing improvement in recent months.
Looking ahead, Vulcan anticipates that sales volumes will remain relatively flat at low levels in the first half of FY26, with a potential rebound in the second half. The company is prioritising customer service, working capital management, and cost control to position itself strongly for a market recovery.
Next Steps
Vulcan plans to release its full audited FY25 results on 26 August 2025, accompanied by a webcast and conference call. Investors will be keen to delve into the detailed financials and management commentary to better understand the company’s trajectory and resilience amid ongoing economic uncertainty.
Bottom Line?
Vulcan Steel’s cautious optimism and debt reduction set the stage for a potentially steadier FY26, but market volatility remains a key watchpoint.
Questions in the middle?
- How will Vulcan’s cost control measures impact profitability if market conditions worsen?
- What specific customer segments are showing early signs of renewed momentum?
- How sustainable is the current pricing environment given competitor pressures?